Haul out the holly: After years of the holiday season being dogged by pandemic restrictions and other disruptions, there’s some indication shoppers are readying their wallets for more spending. That’s not to say financial concerns, including inflation, aren’t top-of-mind. But for marketers, there may be an opportunity to finish out the year on a high note if they can strike a winning tone amid the uncertainty.

Consumers are expected to drop an average of $1,652 this holiday season, a 14% year-over-year increase that surpasses pre-pandemic figures for the first time, according to Deloitte’s 2023 holiday retail survey. Just a week away from the Thanksgiving and Black Friday shopping blitz, the sunny forecasts are likely welcomed by marketers. Still, the pressure to perform well after a turbulent period has created some additional anxiety around brands getting it right, according to David Sant, head of client success at JuiceMedia.IO.

“[There’s] certainly a cautiousness ... just with all that’s going on in the world, the economy is a little bit TBD for some folks,” said Sant. “There’s some added pressure to make Q4 great, as it always needs to be, but this year has a special, acute focus.”

A goal for many brands in 2023 is finding the right balance between lighthearted sentiment and affordability in their messaging. Meanwhile, others are betting on tech to win digital-first younger audiences. Also observed are shifts in consumer preferences — like a growing desire for in-person shopping — that will result in some companies taking things back to the basics.

The gift of value

Consumer sentiment is contributing to marketers’ trepidation. As inflation lingers, three-quarters of shoppers are expecting higher prices versus last year, per Deloitte, while savings rates have dwindled and student loan repayments have kicked back in. Similar to last year, marketers hoping to win shopper dollars will not only need to come prepared with a relevant value proposition, but also to go the extra step by catering to changing customer needs.

“Obviously, inflation is still top of mind for a number of consumers. A significant majority of those we surveyed are expecting higher prices, but they’re not letting that stop how much they’re going to spend,” said Brian McCarthy, a principal in Deloitte’s retail practice. “They’re just moderating their budgets for what they think they can get for those dollars.”

Marketers aiming to connect this year will need to match the tone of the majority of people who continue to express concerns around financial strain. In that sense, messaging has yet to return to the glitz-and-glam tactics of the past, and will more likely echo the dialed-back tone from 2022.

“In terms of the tonality of the creative, I would say it’s probably not as muted as it was last year, but it is definitely not as triumphant as we’ve seen in other years where people are kind of beating their chests,” Sant said.

Emotional appeals are one way to engage stressed-out shoppers. Sam’s Club earlier this month unveiled a holiday campaign, made with Arnold Worldwide, that is meant to promote togetherness over materialism. Amazon is similarly tugging on the heartstrings with a global “Joy is shared” push that brings together themes of friendship and nostalgia, supported by a version of The Beatles’ “In My Life.”

Trendy technology is providing an assist on some bids at warming hearts. Coca-Cola’s holiday campaign, “The World Needs More Santas,” touts a message that anyone can be Santa through kindness, with a planned element around artificial intelligence as part of the company’s “Create Real Magic” platform. Meanwhile, Lego is leveraging augmented reality for a transatlantic snowball-throwing contest.

Others are meeting the moment by focusing more squarely on savings. This month, Target launched a seasonal campaign that is guided by the mantra, “However You Holiday, Do It For Less.” In October, JCPenney revealed a holiday marketing playbook that also revolves around savings opportunities and aligns with the department store’s larger turnaround plan targeting working families and making their dollars stretch further.

With brands expected to emphasize affordability, marketers looking to differentiate from the pack might prioritize purpose and progress on environmental, social and governance (ESG) goals, according to Gartner’s 2023 Holiday Marketing Guide. This approach could be impactful among values-driven shoppers, with 38% reporting that their attitude or behavior toward a brand positively changed when their ads were centered around inclusivity, per the report. Nearly half of both Gen Z and millennials said that what a brand stands for factors into their purchase decision.

In the same vein, during a year where culture war fallout blindsided brands, Gartner analysts stressed that the season isn’t a time to unveil dedication to a new cause, but rather an opportunity to flex efforts already underway. Brands should also come prepared with an escalation plan in place to address any potential backlash.

“I think all marketers are skeptical of ending up in the headlines this holiday season,” said Kassi Socha, a director analyst for Gartner. “Our biggest advice is holidays, when there’s a lot of volume, it’s not the time to start a new campaign or put a new tent pole down and say, ‘This is what we stand for.’ It’s a time to communicate progress.”

Time for inspiration

As consumers cross items off their holiday shopping lists, traditional savings windows are gaining a renewed sense of interest from shoppers, with promotional events during Black Friday-Cyber Monday week expected to attract 66% of shoppers versus 49% the year prior, per Deloitte. Nearly one-third of shopper budgets will be spent in the last two weeks of November.

“Retailers have been trying to get shoppers to start the holiday spending a bit earlier, but this year, it’s gonna start more in November and more of the spend is gonna be concentrated in November and December,” said McCarthy.

While consumers have indicated that they won’t start their holiday shopping as early this year as they did in 2022, 19% report shopping year-round for holiday gifts versus 16% last year, according to Gartner.

The timing of consumer spending has affected when brands activate their campaigns and on which channels, including those running holiday TV ads. Consumers last year were most likely to engage with TV ads by direct-to-consumer clothing brands the week after Christmas, according to measurement company EDO’s Holiday TV Outcomes report. Meanwhile, department stores like Walmart or Kohl’s saw TV ad engagement last year peak in mid-October when there were fewer ads, a sign that an earlier start could bear fruit.

“A lot of categories of advertising see high engagement rates in their holiday campaigns when they start in October,” said Kevin Krim, president and CEO of EDO. “They see higher response rates, as measured by people searching for their brand, searching for these products, going to their websites.”

Social media is gearing up in a similar fashion, with 34% of consumers planning to use the channel for holiday shopping this year, Deloitte found. Gen Z consumers are wasting no time in looking to social for gift-giving inspiration, an insight that brands should tap into as they attempt to drive awareness with the younger generation, according to Imani Albert, associate strategy director for Movers+Shakers.

“It’s important to match that Gen Z is talking about [the holidays] earlier, they’re prepping for it earlier, they’re feeling festive earlier, so beginning to market earlier in the season is really important to give people gifting ideas, especially in social,” Albert said.

Among trends for holiday marketing on social this year, Albert anticipates that gift guides will be popular as Gen Z focuses on intentional gifting versus a one-size-fits-all approach. Accordingly, influencer partnerships will be a frequently used tactic to connect with consumers looking for advice.

While results so far have been tepid, Albert is also betting on the newly launched TikTok Shop as a way to close the loop on the shopping experience. TikTok continues to be a top platform for Gen Z consumers, and its commerce feature, which officially launched in the U.S. in September, could prove to be an effective way for brands to offer a full-circle shopping experience.

“We tell our brands, if you’re not on TikTok Shop, get on there,” Albert said. “As far as the algorithm goes, it tends to prioritize those posts.”

Make in-store shopping merry

Regarding preferred shopping venues, online-only retailers and mass merchants reign as the preferred formats among consumers at 63% and 53%, respectively, according to Deloitte. Those totals match trends observed in 2019, the consultant said. In-store buying has also recovered to pre-pandemic levels, commanding 37% of shopper budgets in 2023.

A number of brands this year are trying to capitalize on rebounding consumer interest for tactile experiences. JCPenney has created more destinations in-store to promote bigger gifting. Target is bringing back experiential marketing with a Target Wonderland pop-up that will tour several cities, along with upping its focus on brick-and-mortar activations.

A resurgence of in-store shopping is a key opportunity for CMOs to battle the decline of store profitability, Gartner’s report detailed. Brands should enhance IRL experiences with added conveniences like same-day services and curbside pickup and returns, aspects that could make a difference in a sea of red-tag clearance sales, according to Gartner’s Socha.

“If we can create some sort of pop-up experience or cool in-store shopping experience or way to connect with the brand in real life, that’s going to resonate with the consumer,” said Socha. “There’s an appetite to be in a physical place with a brand that there hasn’t been over the last few years coming out of the pandemic.”